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Congress and Cuba: The Helms-Burton Act

Published online by Cambridge University Press:  27 February 2017

Extract

On March 12, 1996, President Clinton signed the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996, generally known by the names of its principal sponsors as the Helms-Burton Act. The Act is a mixture of codification of existing economic sanctions previously imposed pursuant to executive orders; inducements and promises related to restoration of democracy in Cuba; threats against persons from third countries that do business with Cuba; a new, unprecedented remedy for expropriation; and restrictions on entry into the United States by persons who “traffic in confiscated property” or who are affiliated with such persons by ownership, employment or family. The President had indicated that he would veto the Helms-Burton bill if it reached his desk, and quite possibly it would never have done so, but for the events in the Florida Strait on Saturday, February 24, 1996. On that day, at about 3:15 in the afternoon, two Cessna 337 light planes flown by a Cuban-American organization based in Florida were blown up by missiles launched by MIG–23 and MIG–29 planes of the Cuban Air Force, apparently on standing orders of President Fidel Castro. President Clinton immediately condemned the attack, and by the following Wednesday, he announced that he now would sign the Helms-Burton bill, subject to one compromise to be discussed hereafter.

Type
Agora: The Cuban Liberty and Democratic Solidarity (Libertad) Act
Copyright
Copyright © American Society of International Law 1996

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References

* Of the Board of Editors

1 Pub. L. No. 104–114, 110 Stat. 785 (Mar. 12, 1996) [hereafter Act].

2 The bill was passed by the House on September 21, 1995, by a vote of 294 to 134, substantially in the form in which it was eventually signed into law. The Senate version, including titles HI and IV, was met with a filibuster, and efforts to stop the debate fell four votes short. Thereafter, titles III and IV were dropped from the bill, and as thus pared down, the bill was passed on October 19, 1995, by a vote of 74 to 24. Though the House appointed conferees on November 7, 1995, and the Senate did the same on December 14, 1995, the committee of conference did not meet until February 28, 1996. The conference committee quickly reported out the bill, with titles III and IV restored and with some other changes; it was approved by the Senate on February 29, 1996, by a vote of 74 to 22, and by the House on March 6, 1996, by a vote of 336 to 86.

3 Secretary of State Christopher had sent a letter to Speaker Gingrich in September 1995 stating that he was “deeply concerned” about the Act, and that he would recommend that the President veto the bill if passed by Congress. “We believe,” the Secretary wrote, “that H.R. 927 would actually damage prospects for a peaceful transition, … [and] would jeopardize a number of key U.S. interests around the globe.” Letter from Secretary Warren Christopher to Speaker Newt Gingrich (Sept. 20, 1995) (on file with author).

4 See note 2 supra, and in particular the fact that the committee of conference did not meet until after the Cessna aircraft were shot down. Senator Helms said on February 26, “The legislation will be on the President’s desk before the blood dries on Castro’s hands.” Wash. Post, Feb. 27, 1996, at A1.

5 See Wash. Post, Feb. 25, 1996, at A1.

6 This emerges most clearly from an interview with President Castro published in Time, Mar. 11, 1996, at 38. Referring to prior episodes when aircraft of Brothers to the Rescue (Hermanos al Rescate) had flown near to or over Cuban territory, Castro said:

We discussed it with Raul … and the Joint Chiefs of Staff. We agreed that what happened on Jan. 9 and 13 [leaflets dropped over Havana from the aircraft of the Brothers] cannot happen again. We gave the order to the head of the air force. On Saturday [Brothers’ planes] came twice. The San Antonio air base was on high alert. On the third pass, they scrambled and did their job. They shot the planes down. They are professionals. They did what they believe is the right thing. These are all people we trust, but I take responsibility for what happened. (Bracketed material omitted)

7 See text at note 37 infra.

8 Proclamation 3447 of Feb. 3, 1962, 27 Fed. Reg. 1085 (1962). The proclamation recites the resolutions, just passed at Punta del Este, Uruguay, by a bare two-thirds vote, of the Eighth Meeting of Consultation of Ministers of Foreign Affairs of the Organization of American States, serving as Organ of Consultation in application of the Inter-American Treaty of Reciprocal Assistance, declaring that “the present Government of Cuba … is incompatible with the principles and objectives of the inter-American system,” and urging member states to “take those steps that they may consider appropriate for their individual or collective self-defense.” These texts were interpreted by the U.S. Government as giving authorization under international law for the imposition of the embargo, and overriding the prohibition against economic sanctions contained in the Charter of the Organization of American States.

For the full text of the resolutions, see 2 Inter-American Treaty of Reciprocal Assistance, Applications, 1960–64, at 71, 75 (1964). For background to the negotiations at Punta del Este, see Arthur M. Schlesinger, Jr., A Thousand Days 780–83 (1965).

9 Cuban Import Regulations, 31 C.F.R. §515.201, 27 Fed. Reg. 1116 (Feb. 7, 1962).

10 50 U.S.C. app. §5(b) (1941–76).

11 31 C.F.R. §500.101, issued pursuant to President Truman’s Proclamation of the Existence of a National Emergency of December 16, 1950, 15 Fed. Reg. 9029 (1950).

12 Pub. L. No. 87-195, §620(a), 22 U.S.C. §2370(a) (presently (a)(1)).

13 See 27 Fed. Reg. 2765 (Mar. 24, 1962).

14 Cuban Assets Control Regulations, 31 C.F.R. §515.101, 28 Fed. Reg. 6974 (1963). When §5(b) of the Trading with the Enemy Act was amended in 1977 to limit the authorities there granted to “[d]uring the time of war,” deleting the immediately following words “or during any other period of national emergency declared by the President,” Congress provided, at the request of the administration, that authorities which were being exercised with respect to a country on July 1, 1977, as a result of a national emergency may continue to be exercised with respect to such country through September 1978, and thereafter upon determination of the President that such extension is in the national interest. Presidents Carter, Reagan, Bush and Clinton have annually made the requisite determination with respect to Cuba. See 50 U.S.C. app. §5 note (1988 & Supp. V 1993), plus 59 Fed. Reg. 47,229 (1994) and 60 Fed. Reg. 47,659 (1995).

15 Cuban Assets Control Regulations, 31 C.F.R. §515.329, tracking the corresponding section of the Foreign Assets Control Regulations, 31 C.F.R. §500.329.

16 31 C.F.R. §515.541 (1963–75). The license contained a number of restrictions, notably that a U.S. citizen or resident could not participate in a transaction that would have been contrary to U.S. law but for the license. No comparable general license was issued with respect to subsidiaries of U.S. companies under the Foreign Assets Control Regulations applicable to North Korea, China and later Vietnam.

17 See, e.g., James I. W. Corcoran, The Trading with the Enemy Act and the Controlled Canadian Corporation, 14 McGill L.J. 174 (1968).

18 40 Fed. Reg. 47,108 (1975), repealing 31 C.F.R. §515.541 and issuing a new provision, §515.559. An amendment issued in January 1977 stressed that in order to obtain the required license, the foreign affiliate of the U.S. firm must be independent of the parent firm in such matters as decision making, risk taking, negotiation, financing and arrangement of financing, as further defined. 42 Fed. Reg. 1472 (1977), adopting a new subparagraph (c) in §515.559.

19 42 Fed. Reg. 16,620 (1977), issuing a new §515.563.

20 53 Fed. Reg. 47,526 (1988), issuing amended subsections 515.559, .560 and .563.

21 Pub. L. No. 102-84, Oct. 23, 1992, 22 U.S.C. §§6001–6010 (1994).

22 Id. §1706(a)(1), 22 U.S.C. §6005(a)(1).

23 See note 14 supra.

24 For the definition of “transition government,” see note 32 infra.

25 In July 1969, shortly after President Nixon took office, the Foreign Assets Control Regulations were amended to authorize purchase by U.S. persons abroad, and importation as accompanied baggage, of Chinese merchandise up to $100 per month, provided the merchandise was intended for personal use or as a gift, and provided the payment was made in foreign currency. 31 C.F.R. §500.540, as amended July 23, 1969, 34 Fed. Reg. 12,179 (1969). In terms of economic impact, this change was trivial; in terms of a signal that the American version of the Great Wall around China was not impenetrable, it was an important first step.

In December 1969, the regulations were amended again to remove the presumption that certain categories of merchandise (e.g., hog bristles, jade and certain silks) were Chinese and therefore prohibited to persons subject to the jurisdiction of the United States. 31 C.F.R. §500.204, as amended Dec. 24, 1969, 34 Fed. Reg. 20,190 (1969). More important, subsidiaries of United States firms established abroad were licensed to engage in trade and financial transactions with the People’s Republic of China (but not with North Vietnam or North Korea), subject to the same provisos applicable at the time under the Cuban Assets Control Regulations, note 16 supra, 31 C.F.R. §500.541, issued Dec. 24, 1969, 34 Fed. Reg. 20,191 (1969).

In March 1971, the State Department announced that the prohibition on travel by U.S. citizens to China would not be renewed, 64 Dep’t St. Bull. 510 (1971), also summarizing several other small steps taken during 1970. A few weeks later, it was announced that an American ping-pong team would be traveling to China at the invitation of the Chinese Government. N.Y. Times, Apr. 15, 1971, at 1. The rest, one might say, is history, but in fact several more small changes in the controls were promulgated, until a general license authorizing virtually all transactions and trade in nonstrategic goods between the United States and China was issued in June 1971. 31 C.F.R. §500.547, 36 Fed. Reg. 11,441 (1971); see also 64 Dep’t St. Bull. 815 (1971).

26 I do not, in this brief comment, list all of the many restrictions, prohibitions and warnings in the Act, but rather try to give some indication of the tenor of the legislation. Altogether the Act has 35 sections, many with numerous subsections and sub-subsections.

27 See note 8 supra.

28 See, e.g., Articles of Agreement of the International Bank for Reconstruction and Development, July 22, 1944, Arts. II, III, 60 Stat. 1440, 2 UNTS 134.

29 Note 21 supra.

30 This provision appears to be directed to deals such as cancellation of Cuba’s debt to Mexico in return for Mexican participation in Cuban oil and telecommunication projects. See Heroic Illusions: A Survey of Cuba, Economist, Apr. 6, 1996, at S1, S11–12.

31 See part III infra.

32 The full text of the definition of “transition government” reads as follows:

Sec. 205. Requirements and Factors for Determining a Transition Government.

(a) Requirements.—For the purposes of this Act, a transition government in Cuba is a government that—

(1) has legalized all political activity;

(2) has released all political prisoners and allowed for investigations of Cuban prisons by appropriate international human rights organizations;

(3) has dissolved the present Department of State Security in the Cuban Ministry of the Interior, including the Committees for the Defense of the Revolution and the Rapid Response Brigades; and

(4) has made public commitments to organizing free and fair elections for a new government—

(A) to be held in a timely manner within a period not to exceed 18 months after the transition government assumes power;

(B) with the participation of multiple independent political parties that have full access to the media on an equal basis, including (in the case of radio, television, or other telecommunications media) in terms of allotments of time for such access and the times of day such allotments are given; and

(C) to be conducted under the supervision of internationally recognized observers, such as the Organization of American States, the United Nations, and other election monitors;

(5) has ceased any interference with Radio Marti or Television Marti broadcasts;

(6) makes public commitments to and is making demonstrable progress in—

(A) establishing an independent judiciary;

(B) respecting internationally recognized human rights and basic freedoms as set forth in the Universal Declaration of Human Rights, to which Cuba is a signatory nation;

(C) allowing the establishment of independent trade unions as set forth in conventions 87 and 98 of the International Labor Organization, and allowing the establishment of independent social, economic, and political associations;

(7) does not include Fidel Castro or Raul Castro; and

(8) has given adequate assurances that it will allow the speedy and efficient distribution of assistance to the Cuban people.

(b) Additional Factors.—In addition to the requirements in subsection (a), in determining whether a transition government in Cuba is in power, the President shall take into account the extent to which that government—

(1) is demonstrably in transition from a communist totalitarian dictatorship to representative democracy;

(2) has made public commitments to, and is making demonstrable progress in—

(A) effectively guaranteeing the rights of free speech and freedom of the press, including granting permits to privately owned media and telecommunications companies to operate in Cuba;

(B) permitting the reinstatement of citizenship to Cuban-born persons returning to Cuba;

(C) assuring the right to private property; and

(D) taking appropriate steps to return to United States citizens (and entities which are 50 percent or more beneficially owned by United States citizens) property taken by the Cuban Government from such citizens and entities on or after January 1, 1959, or to provide equitable compensation to such citizens and entities for such property;

(3) has extradited or otherwise rendered to the United States all persons sought by the United States Department of Justice for crimes committed in the United States; and

(4) has permitted the deployment throughout Cuba of independent and unfettered international human rights monitors.

33 See Act §204(e).

34 22 U.S.C. §§1643–1643k (1994), as adopted by Pub. L. No. 88–666, 78 Stat. 1110 (Oct. 16, 1964).

35 See 22 U.S.C. §1643a(1) (1994). Corporations organized under the laws of the United States or of a state of the United States are included in the definition.

36 I do not blame the journalists who described the Act as giving rights to the Cuban-Americans in Miami without mentioning the two-year delay or the preference to persons who were always U.S. nationals. See, e.g., N.Y. Times, Mar. 15, 1996, at D1. The point requires very careful parsing of the Act, with cross-references in hand.

37 But suits commenced while title III is in effect can continue, without reference to a subsequent suspension (§306(c)(3)).

38 Committee of Conference, Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996, H.R. Rep. No. 104–468, 104th Cong., 2d Sess. 65 (1996) [hereafter Conference Report]. The Report says that the committee of conference specifically rejected a proposal of the executive branch to permit suspension on the basis of a determination that it “is important to the national interests of the United States, including expediting a transition to democracy in Cuba” (emphasis added).

39 Id. at 65–66.

40 Senator Dole was a cosponsor of the bill (without the suspension provision) in the fall of 1995. See Cong. Q., Weekly Rep., Oct. 14, 1995, at 3156. Of course, this is not a certain indication of how he would act on the question if he became President.

41 House Comm. on International Relations, Cuban Liberty and Democratic Solidarity (Libertad) Act of 1995, H.R. Rep. No. 104–202, pt. 1, at 39, 104th Cong., 1st Sess. (1995). One of the bill’s proponents from the Cuban-American community, Nicolas J. Gutierrez, Jr., put the point more simply: “We’re not doing this to win lawsuits. The main objective is to drive foreigners out of Cuba.” Economist, Apr. 13, 1996, at 36.

42 Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964).

43 Section 620(e)(2) of the Foreign Assistance Act of 1961, as amended, 22 U.S.C. §2370(e)(2) (1994).

44 For a concise explanation of this point, see Restatement (Third) of the Foreign Relations Law of the United States §444, especially comment e and reporters’ note 4 (1987) [hereafter RESTATEMENT]. For a more detailed discussion by the present author, see Andreas F. Lowenfeld, Act of State and Department of State: First National City Bank v. Banco Nacional de Cuba, 66 AJ1L 795, 801 (1972).

45 376 U.S. at 423.

46 Id. at 427.

47 Id. at 423.

48 In the Sabbatino case on remand, after passage of the Hickenlooper Amendment, the court of appeals held that the amendment “was not a legislative interference with judicial power violative of the Federal Constitution.” Banco Nacional de Cuba v. Farr, 383 F.2d 166, 182 (2d Cir. 1967). This time the Supreme Court denied certiorari, 390 U.S. 956 (1968).

49 See text at note 22 supra.

50 It is worth reminding those readers not closely familiar with American civil procedure that under the rules of general (as contrasted with specific) jurisdiction, once a certain level of activity in the forum state is reached, jurisdiction over a foreign corporation can be sustained without any relation between the claim and the foreign person’s activities in the forum state or (for a federal cause of action) in the United States as a whole.

51 For instance, does sugar grown in 1996 on land that belonged to plaintiff in 1958 qualify as plaintiffs property? What about a hotel built in 1994 on land that once belonged to plaintiff? Or cigars made in Spain from tobacco alleged to be grown in Cuba? and so on. … I raised these issues 30 years ago in the context of the property in suit coming to the United States. Andreas F. Lowenfeld, The Sabbatino AmendmentInternational Law Meets Civil Procedure, 59 AJIL 899 (1965). Clearly the litigation problems are more difficult when the property on which the claim is based is not before the court.

52 See p. 426 supra.

53 At least that is true for claims previously certified by the Foreign Claims Settlement Commission. For other claims (including claims by persons who were not originally U.S. nationals), treble damages come in only after a 30-day notice of claim. I must confess that I am not sure I have gotten all this precisely right, but I did my best in struggling with §303(a)(1)(A)(i); and (3)(B)(i) and (ii); and (3)(C)(i) and (ii), plus the corresponding sections in the Conference Report, note 38 supra. At all events, the in terrorem effect is substantial.

54 There is a provision for a waiver by the Secretary of State, but only on a case-by-case basis, and only for medical reasons or if the applicant seeks to enter the United States in connection with litigation under the Act (§401 (c)).

55 I leave aside, for present purposes, treaties that may have linked the boycotting and the target country prior to the events giving rise to the boycott.

56 A tertiary boycott occurs if state A, the boycotting state, blacklists not only X, which traded with state B, but also Y, which traded with X. Both the Arab boycott of Israel and some of the United States Export Control Regulations have in the past imposed tertiary boycotts.

57 Export Administration Amendments of 1977, Pub. L. No. 95–52, 91 Stat. 234 (June 22, 1977), presendy 50 U.S.C. app. §2407 and regulations thereunder, formerly 15 C.F.R. pt. 369, presently 15 C.F.R. pt. 769.

58 See, e.g., Wall St. J., May 1, 1990, at Al; May 8, 1990, at A18; Apr. 23, 1991, at A6.

59 See Action Affecting Export Privileges Baxter International, Inc., 58 Fed. Reg. 16,813 (1993), and some 40 articles in the Wall Street Journal from 1990 through 1994, especially March 25, 1993, at A3, and March 26, 1993, at A1.

60 Restatement, supra note 44.

61 For evidence that the reliance on the Restatement was purposeful and not coincidental, see, e.g., the prepared statements of Ignacio E. Sanchez and Brice M. Clagett, both proponents of the legislation, in Cuban Liberty and Democratic Solidarity Act: Hearings before the Subcomm. on Western Hemisphere and Peace Corps Affairs of the Senate Comm. on Foreign Relations, 104th Cong., 1st Sess. 129, 136–37 (Sanchez), and 184, 186 (Clagett) (1995).

62 Restatement, supra note 44, §403(2); it is worth pointing out, however, that Mr. Sanchez, one of the Cuban-American proponents of Helms-Burton, note 61 supra, at 136, does go through the Restatement’s criteria and concludes that “[a] review of these factors in light of the current situation … weigh[s] in favor of enacting the bill.”

63 Compare, for example, the majority and dissenting opinions in the U.S. Supreme Court in the recent Insurance Antitrust litigation, Hartford Fire Ins. Co. v. California, 509 U.S. 764 (1993).

64 See, e.g., Vietnam Shifts into High Gear, Bus. Week, Dec. 11, 1995, at 30.

65 Guardian, Mar. 16, 1996, at 11.

On April 30, 1996, the European Commission formally called for consultations with the United States over the Helms-Burton Act–the first step under the dispute settlement mechanism of the World Trade Organization. See N.Y. Times, May 1, 1996, at A9.

66 N.Y. Times, Mar. 14, 1996, at A7.

67 For references to similar reaction to the passage of the Cuban Democracy Act of 1992, note 21 supra, including an order by the British Government to British subsidiaries of U.S. companies pursuant to the Protection of Trading Interests Act not to comply with that law, see Gabriel M. Wilner, International Reaction to the Cuban Democracy Act, 8 Fla. J. Int’l L. 401 (1993).

68 The article cited in note 66 supra states:

The United States Trade Representative, Mickey Kantor, said the American position “is entirely consistent” with both the rules of NAFTA and the world trade talks.

In an interview, Mr. Kantor said that under the trade agreement the United States reserved the right to protect its security interests and to bar from entry people who have committed crimes of moral turpitude under United States laws.

“The combination of those two, or either standing alone depending on the situation, would support our position,” Mr. Kantor said.

69 The story of the pipeline regulations (l’Affaire Gazoduc) has been often told. My version appears in Andreas F. Lowenfeld, Trade Controls for Political Ends 267–306 (2d ed. 1983). For a collection of articles on the pipeline sanctions by authors from the United States, the United Kingdom, the Netherlands and Germany, see 27 Ger. Y.B. Int’l L. 28–141 (1985).

70 Statement of President Reagan on U.S. Measures Taken Against the Soviet Union covering its Involvement in Poland, 17 Weekly Comp. Pres. Doc. 1429 (Dec. 29, 1981), implemented in U.S. Dep’t of Commerce, Controls on Exports of Petroleum Transmission and Refinery Equipment to the U.S.S.R., 47 Fed. Reg. 141 (1982), amending 15 C.F.R. §379.4, §385.2 and pt. 399.

71 Statement of the President on Extension of U.S. Sanctions, June 18, 1982, 18 Weekly Comp. Pres. Doc. 820 (June 21, 1982), implemented by Dep’t of Commerce, Amendment of Oil and Gas Controls to the U.S.S.R., 47 Fed. Reg. 27,250 (1982), amending 15 C.F.R. §379.8 and §385.2(c). The sanction to be applied to a foreign firm found to be violating the regulation would be to place it on a U.S. blacklist, depriving it of all “privileges” of participating in export transactions from the United States or of privileges connected with a specific sector–in this case oil and gas equipment.

72 See, e.g., Aide Mémoire of European Economic Community Concerning President Reagan’s Decision About the Pipeline (July 14, 1982), reproduced in Lowenfeld, note 69 supra, at DS–307; and a longer memorandum drawing in part on the Restatement (Third) of Foreign Relations Law, then in draft form. European Communities, Comments on the U.S. Regulations Concerning Trade with the U.S.S.R., July 1982, reprinted in 21 ILM 891 (1982).

73 President Reagan announced the repeal of the pipeline sanctions in a radio address on November 13, 1982, 18 Weekly Comp. Pres. Doc. 1475 (Nov. 13, 1982). The regulations were formally revoked and enforcement orders in effect were vacated a few days later, 47 Fed. Reg. 51,858, 52,489 (1982).

74 Finding (4) in §2 of the Act reads: “The repression of the Cuban people, including a ban on free and fair democratic elections, and continuing violations of fundamental human rights, have isolated the Cuban regime as the only completely nondemocratic government in the Western Hemisphere.”

Finding (6) reads: “The totalitarian nature of the Castro regime has deprived the Cuban people of any peaceful means to improve their condition and has led thousands of Cuban citizens to risk or lose their lives in dangerous attempts to escape from Cuba to freedom.”

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